The core problem is the fundamental and arbitrary decision by Valve that they want competitive TF2 to be played without any restrictions on any of the weapons they've added over the past 8 years. There are so many weapons that fundamentally do not fit into competitive 6v6 TF2- in order for them to be "fixed" for competitive they have to be ruined for casual play or completely redesigned. Even with this very liberal whitelist, there are still 22 banned unlocks, not counting cosmetics, noisemakers, taunts.
Why does it have to be this way? Sure, in a perfect world, every weapon would be balanced for competitive play and fun to use in casual, but various iterations of the TF2 team have, for the past 8 years, set the game up in a situation where that simply isn't possible.
Reaching for this perfection when it's simply unattainable puts a massive, massive roadblock in the road for competitive TF2 to grow and be legitimized, while still being actually worth playing. The whitelist is a great improvement, I think, because it emphasizes the weapons that truly cannot be reconciled with competitive play. It's up to Valve to accept competitive TF2 cannot coexist with some of the fundamental designs in that list.